The United States

Over the years, a special relationship evolved between the peoples of
Poland and the United States. Poles and persons of Polish ancestry made
enormous contributions at every stage in the development of the United
States. For Poles, family ties and genuine admiration for the United
States negated decades of official anti-American propaganda. As official
relations between Washington and Warsaw deteriorated after the December
1981 imposition of martial law, the United States maintained
communication with the centers of Polish opposition, including leaders
of labor, the intelligentsia, and the Roman Catholic Church. During the
1980s, United States policies of economic sanctions against the regime
and support for the opposition contributed to the ultimate fall of the
communist government.

Immediately after Jaruzelski imposed martial law in 1981, the United
States invoked economic sanctions against Poland. In 1982 the United
States suspended most-favored-nation trade status and vetoed Poland's
application for membership in the International Monetary Fund. In the
following years, Warsaw repeatedly blamed such United States policies
for Poland's economic distress. For the period 1981 to 1985, the Polish
government claimed that United States-inspired sanctions and Western
refusal to reschedule debts and extend additional credit had cost the
Polish economy US$15 billion in export income and other losses.

Despite the end of martial law and limited amnesty for political
prisoners in 1983, relations with the United States did not improve. In
the mid-1980s, Warsaw's determined efforts to prove its loyalty to the
Soviet Union made rapprochement with Washington impossible. Poland
supported the Soviet version of events surrounding the shooting down of
a Korean Airlines passenger plane in 1983, an incident that greatly
heightened Soviet Union-United States tensions. In 1984 Warsaw joined
the Soviet boycott of the Los Angeles Olympic Games in reprisal for the
United States boycott of the previous games in Moscow. Jaruzelski
delivered a scathing attack against United States sanctions policy in a
1985 speech at the United Nations. And in 1986 the Polish government
condemned the United States air strike against Libya.

Official relations between Washington and Warsaw began to improve
after the Jaruzelski government's 1986 general amnesty released all
political prisoners. By early 1987, the administration of Ronald W.
Reagan lifted all economic sanctions and restored Poland's
most-favored-nation trading status. Vice President George H.W. Bush
visited Warsaw the following October and promised United States support
for debt rescheduling in return for the Polish government's pledge to
respect human rights. In 1988, however, the United States decided to
withhold economic aid until Poland reestablished political pluralism.

After the Round Table Agreement of mid-1989, the United States moved
quickly to encourage democratic processes and assist economic reform in
Poland. Toward this goal, President Bush initially promised some US$100
million in economic assistance, and a three-year package totaling US$1
billion was proposed later in the year. In November Walesa visited
Washington and addressed a joint session of the United States Congress,
which greeted his unprecedented speech with promises of additional
economic assistance. The Congress enacted the Support for Eastern
European Democracy Act (SEED) to streamline the delivery of humanitarian
aid and assistance for the development of democracy and freemarket
institutions in postcommunist Eastern Europe. An interagency
coordinating council led by the Department of State was established to
direct assistance to Eastern Europe. The privately managed
Polish-American Enterprise Fund (PAEF) was created in May 1990 to
provide credit for Polish entrepreneurs to start businesses. Contingent
on the level of congressional funding, the PAEF estimated that it would
make US$130 million in loans in 1991. Another nongovernmental
organization, the Overseas Private Investment Corporation, began
providing loans, loan guarantees, insurance, and advice to facilitate
United States private investment in Poland and other East European
countries. In 1990 the United States led an international effort to
create the US$200 million Polish Stabilization Fund, which was
instrumental in making the zloty convertible with Western currencies.

As a major player in such international financial institutions as the
World Bank, the IMF, the Organisation for Economic Cooperation and
Development (OECD), the Paris Club, and the European Bank for
Reconstruction and Development (EBRD), the United States led the effort
to provide debt relief and other economic assistance to Poland. In early
1991, the United States pledged a further 20 percent reduction of
Warsaw's debt to Washington. In a mid-1992 visit to Warsaw, President
Bush praised Poland's political and economic reforms and proposed using
the currency-stabilization fund to spur private-sector growth.